Business Tax Briefing

A weekly round-up of corporate, employment and indirect tax news

20/08/2021

Coronavirus Job Retention Scheme: updated HMRC guidance

HMRC have updated their guidance on the Coronavirus Job Retention Scheme (CJRS). For claims relating to August and September 2021, the government will pay 60% of wages up to a maximum cap of £1,875 for the hours the employee is on furlough. Claims for furlough days in August 2021 must be made by 14 September 2021:

Claim for wages through the CJRS

Check if your employer can use the CJRS

Check if you can claim for your employees' wages through the CJRS 

Notification of Uncertain Tax Treatment: HMRC guidance

HMRC have updated their policy paper on large businesses: notification of uncertain tax treatment, which was first published on 20 July 2021. The requirement to notify HMRC of uncertain tax treatment is expected to apply from April 2022. HMRC have also published draft guidance on how the rules will operate. 

Self-Employment Income Support Scheme: updated guidance

HMRC have updated their guidance Check if you need to change your Self-Assessment return for SEISS. The revised guidance explains that, if Self-Employment Income Support Scheme (SEISS) grants have been included in an incorrect part of a tax return, amendments can be made by telephoning 0800 024 1222. 

HMRC appoints new Director General of Customer Strategy and Tax Design

HMRC have announced that Jonathan Athow, currently Deputy National Statistician and Director General for Economic Statistics at the Office for National Statistics (ONS), will be re-joining HMRC from October 2021 as Director General for Customer Strategy and Tax Design. This follows the departure of Ruth Stanier from the role as she takes a 12-month career break. Before Jonathan Athow's role at the ONS, he was the Director of Knowledge, Analysis and Intelligence at HMRC and before that he worked at HM Treasury on a range of economic and policy issues. 

Entrepreneurs’ relief: permission to appeal to Court of Appeal

The taxpayer has been granted permission to appeal to the Court of Appeal against the Upper Tribunal’s decision in HMRC v The Quentin Skinner 2005 Settlement L & Others. The issue in the case is how long an individual who personally qualified for entrepreneurs’ relief (now business asset disposal relief) needed to have an interest in possession in settled shares in order for entrepreneurs’ relief to be available to the trustees on disposal. The Upper Tribunal held that a trust beneficiary needs to have an interest in possession for a period of at least one year ending in the three years preceding the disposal by the trustees (two years under current rules), in addition to meeting the other qualifying conditions. The First-tier Tribunal had agreed with the taxpayer that there was no minimum period over which the interest in possession needed to be in place before the trustees' disposal, provided that the trust beneficiary met the requirements for the relief personally for the required minimum period. 

Scottish government: consultation on proposed Minimum Income Guarantee

The Scottish government has launched a consultation on a proposed Minimum Income Guarantee (MIG), the purpose of which is to ensure that a certain level of income is earned by lower earners. This could be delivered through employment, targeted welfare payments and also through other types of support or services to be provided or subsidised by the state. The consultation follows a report Securing a Living Income in Scotland: Towards a Minimum Income Guarantee produced by the Institute for Public Policy Research and published in March 2021 which proposed that Scotland should have a MIG by 2030. A MIG differs from a Universal Basic Income, although the two are related. A MIG is targeted at those on low incomes, and includes other forms of support, besides cash payments. A Universal Basic Income would apply to everyone, including those who are not on a low income.

HMRC publish worst excuses for not paying the National Minimum Wage

HMRC have published a selection of the worst excuses HMRC officers have been offered for not paying the national minimum wage (NMW). They include:

‘My accountant and I speak a different language – he does not understand me, and that is why he does not pay my workers the correct wages.’

‘My employee is still learning so they are not entitled to the NMW.’

HMRC’s release reminds employers and workers of the current NMW rates and advises workers to check the hourly rate of pay they are getting, and to check any deductions or unpaid working time. 

Dbriefs webcasts

Our programme of Dbriefs webcasts is taking a break over the summer. The programme will recommence in September. You can catch up on any titles you may have missed, including:  Demystifying The New UK Patent Box Regime; G20/OECD The Digitalised Economy - Political Agreement On Taxation Of Digital Economy (Pillar One) And Global Minimum Rate (Pillar Two); Taking Action On Tax Evasion: Corporate Criminal Offence And BeyondHMRC Review Of Transfer Pricing Documentation and many more. For further details of our webcasts available to view on demand see here.  

Claims Advisory Group: VAT on managing PPI mis-selling claims: Upper Tribunal

Claims Advisory Group Ltd helped people submit claims if they had been mis-sold PPI policies, and retained 39% of any successful claims for its services. It argued that its services should be exempt as the services of an insurance intermediary – although it was not introducing customers to an insurer, it was managing the end of their relationship with the insurer. The Upper Tribunal, like the First-tier Tribunal before it, was not persuaded. The economic purpose and commercial reality of CAG’s services was to pursue a claim for compensation, not to terminate a PPI policy. CAG was not acting as an insurance agent, as it was not introducing a customer seeking insurance to an insurer. In most cases CAG never had any contact with the insurer – what it did was seek compensation from the intermediary that had earned commission from selling the PPI. Finally, the Upper Tribunal ruled that CAG’s services were not ‘related to’ the PPI, as they were too remote (they involved the way that PPI was sold by a third party, not the policy itself, and the policy may have ended by the time CAG became involved). Consequently, CAG’s services were not exempt as the services of an insurance intermediary, and its appeal was dismissed.

VAT: new online service and checklist for partial exemption special methods applications

HMRC have launched a new online service for submitting proposals for partial exemption special methods (PESMs). Notice 706 has also been updated with a checklist setting out 43 pieces of information that must accompany a PESM proposal. As well as basic information about a taxpayer’s activities, these include a requirement to compare the proposed PESM against the standard method, a worked example of how the proposed PESM would have operated in the previous tax year, details of overseas establishments, etc. Use of the online service is not compulsory, and proposed PESMs can still be emailed to HMRC. However, in either case, Notice 706 now provides a comprehensive checklist of the information that HMRC will expect to be provided with.